Stocks, Futures Steady Ahead of Inflation Report: Markets Wrap

(Bloomberg) -- Stocks and equity futures were steady Wednesday as investors awaited a key U.S. report on consumer prices to assess the risk of tighter monetary policy. Treasury yields climbed.

In Europe, value sectors such as energy and banking gained, while consumer companies and drugmakers trailed. Contracts  on U.S. gauges were steady after the S&P 500 Index fell for the first time in nine days. Tesla Inc. gained in European trading after its worst selloff since September 2020.

MSCI Inc.’s Asia-Pacific share gauge trimmed earlier losses spurred by data showing an acceleration in Chinese inflation, with sentiment helped by a late-session rally in the country’s property stocks. 

With global equities hovering near all-time highs and the Federal Reserve warning of the rise in risky-asset prices, investors will parse Wednesday’s inflation report for any clues on policy tightening. The dollar was steady, while yields on U.S. Treasury inflation-protected securities were near record lows.

San Francisco Fed President Mary Daly indicated she expected “eye-popping” inflation to subside next year as pandemic-related supply-chain snarls abate. St. Louis Fed President James Bullard reiterated he’s penciled in two rate hikes in 2022.

“Because we haven’t seen inflation for a while, people aren’t used to it,” Drew Matus, chief market strategist at MetLife Investment Management, said on Bloomberg Television. “What we should expect over the next half a year is -- as people become more understanding of what the Fed might do -- we are going to see more volatility.”

Investors are also keeping an eye on China Evergrande Group, which faces a payment test on dollar bonds.

Elsewhere, oil advanced after the U.S. administration chose not to tap reserves for now, and an industry report showed a decline in U.S. inventories. Iron ore tumbled on dimming prospects for steel demand owing to China’s real-estate troubles. 

Bitcoin traded below $67,000. Coinbase Global Inc. shares fell in extended trading after the biggest U.S. digital-asset exchange reported worse-than-forecast results.

What to watch this week:

• China’s Communist Party’s decision-making Central Committee meets through Thursday
• U.S. wholesale inventories, CPI, initial jobless claims Wednesday
• U.S. bond marked is closed in observance of Veterans Day Thursday
• China holds its annual Singles’ Day, the world’s biggest shopping festival, when e-commerce giants like Alibaba and JD.com Inc. lure buyers with bargains Thursday

For more market analysis, read our MLIV blog.

Stocks

• The Stoxx Europe 600 rose 0.2% as of 8:30 a.m. London time
• Futures on the S&P 500 were little changed
• Futures on the Nasdaq 100 were little changed
• Futures on the Dow Jones Industrial Average were little changed
• The MSCI Asia Pacific Index was little changed
• The MSCI Emerging Markets Index rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro fell 0.2% to $1.1568
• The Japanese yen fell 0.2% to 113.09 per dollar
• The offshore yuan was little changed at 6.3912 per dollar
• The British pound fell 0.1% to $1.3541

Bonds

• The yield on 10-year Treasuries advanced four basis points to 1.47%
• Germany’s 10-year yield was little changed at -0.29%
• Britain’s 10-year yield advanced two basis points to 0.85%

Commodities

• Brent crude rose 0.6% to $85.31 a barrel
• Spot gold fell 0.3% to $1,826.86 an ounce

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